George Lucas, the man who screamed like a wounded wookie when the Phantom Edit first introduced JarJar-free prequelosity to millions of online nerds, has come around, kind of.

Lucasfilm, which is in the middle of a hype cycle centered around the original film's thirtieth birthday extravaganza, has announced that this time around, fans are being invited to mash-up, remix, and even eff with the official storyline and timeline, using 250 officially sanctioned video clips from all six feature-length films. They're partnering with online video editing site Eyespot.com to do it, which should provide Web 2.0 legitimacy to the plan, plus a huge boost in subscriber numbers for the video site.

Of course, Lucas isn't exactly uploading the master keys to the Death Star; for one thing, Eyespot will use some kind of pattern recognition software to censor out any user-generated clips that contain "nudity, pornography, and the like" (seems like a pretty conveniently broad stricture). Also, remixers will have zero stake in their work; Eyespot and Lucasfilm will divvy up the proceeds from streaming advertisements served to viewers. And don't even think about the possibility of either the source materials or the products being released under a Creative Commons license...

...But all in all, we like this. We are happy. We might even make an all-Jar-Jar-all-the-time edit, if it's not deemed obscene.

This week, I interviewed Pandora founder and pianist Tim Westergren, to get his take on the recent webcasting rate hikes. The result is published in Truthdig.com, to which I recently started contributing media/tech news analysis.

Sinnreich: What do you think the impact of these new rates will be on the Internet radio industry as a whole?

Westergren: If these new rates really stick, it’ll stop. No
legitimate webcaster can afford to stream. There may be a few large
terrestrial stations that keep their streams going online as a loss
leader, but the whole business and ecosystem around Net radio is really
going to be wiped out. On the other hand, there are 70 million Americans currently
listening to radio over the Internet. If you suddenly turn it off, the
demand doesn’t go away. More Web radio will start sprouting up from
countries where royalties aren’t strictly enforced, and people will
start tuning in to them.

If you're at all concerned about the future of internet radio, I highly recommend you check out SaveNetRadio.org, which contains further information, as well as a petition.

Got a couple of emails and phone calls today from the good folks over at EMI -- they're announcing something big tomorrow at 5am PDT (too early for me to rise -- even if the messiah came knocking, he'd have to wait). EMI honcho Eric Nicoli and Steve Jobs will be making a joint announcement about "AN EXCITING NEW DIGITAL OFFERING."

Based on recent rumblings, Jobs' disingenuous rant against DRM, and the fact that iTunes Music Store licenses are up again as of today, I'm betting the new announcement includes the following:1. variable pricing
2. royalties on iPod sales
3. NO DRM!

That's just a guess. But if I'm right, this is pretty huge. An end to DRM would mean the real birth of a viable digital music market -- one that could even make up for the drop in CD sales. If all the majors get on board, and the iPod/iTMS blockade comes to a close, and consumers can actually fill their iPods with legally obtained, uncrippled major + indie label music for $100/year, I'll happily predict a $5 billion domestic digital music market within 5 years -- that is to say, by year-end 2012. (The domestic market was about $1B last year).

Of course, blanket licensing at the ISP level would be even better -- and currently represents one of the major "x-factors" in this crazy little chess game. More on that another time.

UPDATE:

Seems like the press release could be about something else entirely -- the long-hinted, never-arrived-at licensing of the Beatles catalog for digital distribution. This would also be pretty big -- speculation has typically placed the value of the catalogs' digital rights in the low billions, and word has been that EMI and the Beatles' publishing representatives wanted a heavy-duty upfront against royalties... Either way, tomorrow will probably be an interesting day.

UPDATE 2:

So it turns out I was right, by and large -- at least, on 2 out of 3 points. EMI is ending DRM for its digital catalog, and it's pumping the price point up to $1.29. In addition to the freedom of consumers to exercise their fair use rights, there will be an additional value-add in that the files will apparently be available in "bit rates up to CD quality" -- although every n00b knows that bitrates aren't everything -- there's a significant difference between MP3 and AAC at consistent bitrates, so they may just be plugging the quality gap between formats.

This is really pretty big news. The reasons are all tactical -- EMI wants to forestall any further talk of compulsory digital licenses (see above), not to mention sell more music, and Apple wants to forestall the otherwise inevitable loss of its market share to wireless competitors, esp. the carriers (look for the next generation of iTunes to have very robust, very prominent stream-my-library-to-my-phone capabilities -- just in time for the debut of the iPhone). However, the net effect is much larger; from the vantage point of history, this may very well be the day that the tide turned for the digital music industry, ushering in a period of peace, prosperity and rockin' good times for all. If only this kind of win-win-win situation were possible in the Middle East...

Incidentally, the only point on which I was wrong is that EMI apparently didn't demand (or didn't get) its pound of flesh, measured out in royalties from iPod sales. That's a multibillion-dollar pot of gold the labels would just love to dive into. Thank heavens, that would be a pretty disastrous direction for the industry to move in -- pretty soon, levees would be weighed against every piece of hardware that in any way handles digital media or information. Crisis averted, for now.

UPDATE 3:

Here's a link to a more in-depth article I wrote on this for Truthdig.com.

Apologies for the late post -- my high-end, less-than-a-year-old Dell laptop succumbed to the blue screen of death yesterday, and after hours on the phone tech support, the best course of action we could develop was a complete factory restore. Laptop's still out of commish, busy backing everything up before I wipe the slate clean, so I write from my wife's iBook (any other PC users out there find Mac keyboards hard to type on?)

Anyway, the big news is that Sharman Networks, parent company of the Kazaa file sharing network, has settled with the majors for about $115 million. After the Grokster ruling last year, of course, this was only a matter of time [full disclosure: I was an expert witness for the defense in that case, arguing that networks have substantial enough non-infringing uses, and enough beneficial effects on industry and society, that they shouldn't be held accountable for the actions of some of their users]. Now the plan is to convert the company into a "legitimate" service which collects revenues from users and delivers royalties to labels. Here's my quick take:

1. Artists are unlikely to benefit. As far as I know, not a single artist has ever received supplemental royalties as a result of the hundreds of millions of dollars in court settlements the majors have reaped from a handful of corporate legal foes (MP3.com, Napster) and thousands of their own customers. This may be perfectly legitimate from an accounting standpoint (maybe they can argue that legal fees, plus pain and heartbreak, are recoupable against royalties), but it's absolutely ridiculous from a PR or an ethical standpoint (there's a difference, y'know). After all, these battles have been waged in the names of the artists -- why not cut them in on the spoils of war?

2. Legal P2P is a very long shot. Last time I checked, "legal P2P" providers Snocap and Mashboxx are doing some licensing, but not much business. There's a reason for this: it's a bad idea. The benefits of unfettered P2P to consumers are numerous -- availability of digital content not commercially available (although the gap is slowly closing), a network effect (lots of users = fast downloads, lots of content), and the ability to fill an iPod without taking out a second mortgage. Legal P2P doesn't offer any of these; their content libraries are limited, the small user bases preclude any beneficial network effects, and the songs have to be paid for on a per-track basis. In other words, consumers don't care what the network looks like -- they care what the service looks like. This is why my long-term money is still on subscription services like Rhapsody, URGE and Napster. As soon as they become truly portable (through wireless distribution or iPod DRM licensing or the iPod finally losing its de facto monopoly), I expect that market to take off.

3. P2P is alive and well, and living overseas. It's an old chestnut, but you can't kill P2P with legal rulings. As long as you have massive demand, and a distributed developer community one step beyond the reach of American regulation, there will always be a new-and-improved P2P infrastructure available to match the needs that "legitimate" businesses just can't satisfy. So, the real way for the recording industry to stem the massive demand for P2P is to satisfy their consumers' needs. This means quality, affordability, portability, and breadth of content. If you build it, they will pay.

3. Where is the $115M coming from? There's no way that Sharman has $115 million sitting around in its bank account, and a fire sale of its assets is unlikely to provide a tenth of that sum. So where is the $115M going to come from? Equity stakes don't cut it -- the company isn't worth anything until investors pour some money into it, and who's going to pour money into it if the equity's already been claimed? Long-term promissory notes? Cockleshells and paperclips? Kudos to any reader who can answer this puzzle.

It's always interesting to see how mainstream media co's try to harness the power of remix culture to their best advantage. Sometimes it's a total failure, sometimes it's actually pretty cool.

Anyway, now Virgin Records R&B diva Janet Jackson's getting into the game. Fans (and, presumably, non-fans) can download pics of her and use them as they will to create new designs -- one of which will be chosen as the artwork for her forthcoming album 20 Years Old. Thematically, this is pretty cool (the album is supposed to stylistically harken back to 1986's Control -- hence the name). Artistically, my feeling is "eh." According to the article/press release,Janet does not give participants any parameters for their designs. She wants them to be uninhibited and to "go for it."

Any Radar Waves reader knows that I'm no fan of censorship, so it might come as a shock to hear that, this time, I'm taking the side of the scissors-wielders.

Last week, Federal Judge Richard Matsch of Colorado (best known for his role in the Timothy McVeigh trial) ruled against companies such as CleanFlicks and (now defunct) Family Flix USA, arguing that their business model -- scrubbing Hollywood films of their naughty bits and renting or selling the flaccid remainder to "family-friendly" types -- is a violation of copyright law, because the censoring is done without the consent of the copyright holder.

This is yet another disturbing indication that "moral rights" -- the notion that a content creator (or a corporation that subsidizes content creation) has some kind of enduring control over the ways in which its audience/customers uses said content -- is on the upswing in American jurisprudence. As I understand it, moral rights are a European import, with no legal foundation in American copyright law.

This decision is particularly troubling because it spells hot water for everyone else who is in the business of aiding and abetting innovative uses of recorded media -- mash-ups, remixes, and what have you. Saying that content creators have total control over how their content is used, even post-sale, is another way of saying that consumers have minimal control over how they interact with content, even after they buy it.

IMHO, forcing people to watch the naughty bits in a movie is every bit as much an insult to our personal liberty as forcing people not to watch the naughty bits; call it "reverse censorship," if you like. Some like their flicks cut, some like 'em uncut. Who am I -- or Hollywood -- or Judge Matsch, for that matter -- to command otherwise?

Slyck is reporting that Swedish IP tongue-waggers The Pirate Bay, perhaps the world's largest and best-known torrent tracker, has been raided by Swedish police. The raid was likely conducted at least in part on behalf of the MPAA, which has called the site "one of our No. 1 targets."

According to a message posted on the site, the charges are breach of copyright law, and contributory infringement. Given the site's long history of transparency and more or less officially sanctioned operations, it will be interesting to watch the case play out in the EU courts. To what extent will international IP treaties trump local laws? How much authority will American business interests continue to exert abroad, as cultural power shifts to Europe and Asia? We will no doubt be revisiting these questions as developments unfold.

I have to say, I'm a little surprised at this turn of events. After BitTorrent's recent distro deal with Warner, you'd think the join-em-rather-than-lick-em mentality was on the upswing here in Hollywood. The potential synergies between PirateBay and Disney's upcoming mega-smashbuster Pirates of the Caribbean: Dead Man's Chest should be -- arrrrhhhh! -- obvious.

Is it me, or is Creative Commons starting to get some mainstream traction? Seems like they're popping up on our radar a lot these days (so to speak).

The latest example: Pearl Jam's icky new video for "Life Wasted" was just released online under a CC license (attribution-non-commercial-no derivatives -- so that means remixing is verboten). This may be the first major label video ever released under a CC license (neither CC nor I can think of another example). And, until this Wednesday, the video can be downloaded for free at Google Video.

Here's the question: will the free download window and CC redistribution license increase sales for the video and song, through the power of viral marketing, or will it diminish sales because, hey, fans can get it legally for free?

One would imagine J Records must be tracking this somehow -- either through benchmarking sales, or through customer research. If not, they should be. Maybe we should give them a buzz...

Ultimately, the proof will be in the pearl jam. If we see more releases like this in the coming months, that means J Records is happy. If not, gear up for more clashes between publicity-hungry artists and control-hungry risk averse labels.

Somewhere high in the Hollywood Hills, Steven Soderbergh is wetting his pants.

Yesterday saw a minor milestone in participatory culture: the online release of Elephants Dream, a community-financed CGI film made entirely using open-source applications, developed by seven artists around the world.

In addition to its OSS provenance, the film was released for free under a Creative Commons attribution license, so can be used by anyone in any way, as long as the original artists are credited with the end result.

The site's servers are waaaay overloaded (even though the film is a short, they released it in HD with 5.1 channel surround sound, so the file comes to hundreds of MBs), but fortunately, it was also released via BitTorrent, so I'm currently downloading at about 133kbps. I'll update once I've had a chance to download and digest the film.

UPDATE: Watched the film this weekend. It was beautiful to look at and completely impenetrable (at least, to me). Kind of like a cinematic sequence in an XBOX 360 RPG. Suffice to say, Hollywood's not in imminent danger of losing their audience to "open movies." Then again, they are in danger of losing their audience to XBOX 360 RPGs. So I guess it all balances out in the end.

Here's a totally surprising and unexpected piece of news: the RIAA is suing one of its fastest-growing revenue generators. This week, public enemy #1 is XM satellite radio (which generated 2/3 of a BILLION dollars last year from paying digital music fans).

There are a lot of strands to follow on this story, but here are a few:

1. XM claims that
"this is a negotiating tactic on the part of the labels to gain an advantage in our private business discussions," according to a recent statement. This is fairly believable. Licenses are expiring, and lord knows the major labels have pulled out similar stops in recent battles over license renewals. Witness the recent presidential campaign-worthy mudslinging fest between Apple and the labels over iTunes pricing models.

2. However, Fred von Lohmann at the EFF's got a different take, arguing that the suit is part of a larger pattern of RIAA restriction against technological and business innovation. In his words, this suit, along with previous suits against Napster/MP3.com/Grokster, "represent a coordinated strategic effort by the entertainment
industry to change the copyright law jurisprudence that applies to
everyone."

3. Nobody but the RIAA seems to think this suit is actually about XM violating the terms of its license. Although, from a legal standpoint, they might have a leg to stand on. I dunno, depends whether you grant primacy to the AHRA, the DMCA or recent caselaw. It doesn't seem cut-and-dry to me either way, although a full-on legal analysis of the case might sway me to one side or the other.

4. From a consumer standpoint, this service is a must-have. The right and the technical ability to make cassette tapes from broadcast radio have been established for decades, and time-shifting technologies such as PVRs are becoming the dominant mode of media consumption across all industries -- film, TV, music, news, etc. etc. etc.

5. I think part of what makes XM vulnerable right now is that they are both the broadcaster and the device manufacturer. The RIAA can claim that the combination of the programming and the record function "effectively provides a digital download service," which I would guess isn't covered by XM's licenses. If XM were simply broadcasting, and another company were simply shipping receivers with a record function, the RIAA couldn't make such an argument -- or, at least, not as easily. There's a little recommendation for vertical dis-integration.

6. This is the last thing XM needs. The company has yet to turn a profit, and even with close to a billion in revenues, they're still losing money with every new customer. I've never been bullish on satellite radio as a long term business, primarily because it will take longer to recoup infrastructure, programming and customer acquisition costs than the likely consumer demand for the service will last. Ultimately, why wouldn't premium audio programming piggyback on high-speed wireless Internet networks, either via EV-DO devices provided by carriers, or via WiFi devices tapping into municipal networks?

UPDATE: The Home Recording Rights Coalition (HRRC) has pointed out that this suit violates explicit promises made by the recording industry during both the Grokster suit and the AHRA hearings:

"The lawyer that signed the complaint against XM is the same lawyer who told the
Supreme Court that ripping a CD to a PC and then to a handheld device (without
paying any royalty) is lawful. He represents the same industry that, in seeking
'inducement' legislation, promised that it would never be applied against
devices such as a TiVo personal video recorder."